Illinois To Delay Pension Payments Amid Budget Woes: "For All Intents And Purposes, We Are Out Of Money Now"

Tyler Durden's picture

By now, Illinois' budget problems are no secret.

Back in May, after the State Supreme Court struck down a pension reform bid, Moody's move to downgrade the city of Chicago thrust the state's financial woes into the national spotlight. 

Since then, the situation hasn't gotten any better and despite hiring an "all star" budget guru (for $30,000 a month no less), Bruce Rauner was unable to pass a budget in a timely fashion leading directly to all types of absurdities including everything from the possibility of shortened school years to lottery winners being paid in IOUs.

Now, as Bloomberg reports, pension payments are set to be delayed. Bond payments, apparently, will still be made.

Illinois will delay pension payments as a prolonged budget impasse causes a cash shortage, Comptroller Leslie Geissler Munger said.


The spending standoff between Republican Governor Bruce Rauner and Democratic legislative leaders has extended into its fourth month with no signs of ending. Munger said her office will postpone a $560 million retirement-fund payment next month, and may make the December contribution late.


“This decision is choosing the least of a number of bad options,” Munger told reporters in Chicago on Wednesday. “For all intents and purposes, we are out of money now.”


Munger said the pension systems will be paid in full by the end of the fiscal year in June. The state still is making bond payments, she said.


“We prioritize the bond payments above everything else,” Munger told reporters.

And from Reuters:

Illinois Comptroller Leslie Munger said on Wednesday a $560 million November pension payment will be delayed due to a cash crunch stemming from the state's budget impasse.


Despite the delay, state pension funds will be paid in full by the end of fiscal 2016, Munger said at a news conference in Chicago.

Here's some color (again via Reuters) from Tuesday's preview:

Oct 13 Illinois' budget impasse has reached a point where full and timely payments for big ticket items such as pensions could be in jeopardy, the state comptroller's office indicated on Tuesday.


Comptroller Leslie Munger set a Wednesday press conference "to discuss the significant cash flow constraints the continuing budget impasse is placing on state finances and the challenges of making timely state payments in the months ahead," according to an advisory from her office.


The battle between Republican Governor Bruce Rauner and Democrats who control the legislature has left Illinois without a budget for the fiscal year that began July 1. However, the state is required, even without a budget, to put aside money each month for pensions and debt service on bonds.

One wonders what these means for Chicago's bankrupt school system, which, as we reported early last month, was depending upon nearly a half billion in funding from Springfield to plug a gaping budget hole. Further, this would seem to suggest that anyone who wins more than a few thousand in the Illinois lottery can go ahead and figure on getting a pieces of paper with Bruce Rauner's picture rather than Ben Franklin's for the foreseeable future. 

We also encourage readers to review this piece by Reuters in full as it contains several of the most egregious examples of government waste and inefficiency you'll ever come across  and goes on to say that reform simply isn't an option, as the Illinois legislature is filled with lawmakers who have at one time or another themselves benefited from the state's sprawling local bureaucracies. Reuters also says it has identified nearly a dozen instances where husbands employ wives, mothers employ daughters, and fathers hire sons," suggesting nepotism weighs heavily on the already elephantine system. 

Bear in mind that this is the same state whose court system refuses to allow efforts at pension reform to move forward, and while all of this may seem like a recipe for default disaster, just remember, PIMCO sees a lot of "long-term value" in Chicago's debt.

Finally, a look at just how underfunded Illinois' pension system truly is:

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Herd Redirection Committee's picture

Derr.. Unfunded liabilities?  Whats that?  Surely its not a balance sheet item... Right?  Something we can hide in the notes, or possibly off-balance sheet?

Crash Overide's picture

Surely the toll roads will pay for it, I mean higher taxes, I mean more government, sorry I mean more taxes...

hedgeless_horseman's picture



"You'll wear leather clothes that will last you the rest of your life. You'll climb the wrist-thick kudzu vines that wrap the Sears Willis Blackstone Tower. And when you look down, you'll see tiny figures pounding corn, laying strips of venison on the empty car pool lane of some abandoned superhighway." 


- Tyler Durden

ZerOhead's picture

Then you'll see the cops come over and take it all away from them... it's still their car pool lane after all.

NoDebt's picture

I wonder how many people in Illinois kept up with the news out of Greece the last few years and see the parallels?  Scratch that.  I wonder how many Illinois PENSIONERS kept up with the news out of Greece the last few years and see the parallels?

They will lie to you right to the end.  They will tell you you're being paid when you're not.  They will promise full payment in the future, but it won't come.  And when you finally pick up your pichfork and head for the government offices downtown, you will find them empty.

LowerSlowerDelaware_LSD's picture

This is obviously whey we MUST vote for more of these progressive types.

Such a good job of promising the world then not delivering.  But it's the thought that counts in progressive land.

"FREE college for everyone!!!" - Sanders/Clinton. Morons.

ZerOhead's picture

Is it a prerequisite to be a lesbian to enroll in Lesbian Studies 101?

dontgoforit's picture

Welcome to the First Fifth Ninth Bank of Federal Reservations - "We Finance Anything"

Publicus's picture

Just print the money out of thin air, it's as simple as that. Modify a few digits in the computer files.

MANvsMACHINE's picture
"For All Intents And Purposes, We Are Out Of Money Now"

should be...

"We Are Out Of Money Now"

or even better...

"We Have Been Out Of Money For Many Years"
clooney_art's picture

Nice. That's what I expect at the end for all government employees.

They will be Greeced.

TBT or not TBT's picture

First they came for the Illinois lottery winners and I said nothing because I wasnt a lottery winner.  

mkkby's picture

Liberals and progressives are so stupid, I hope they get it right up the ass. 

Like it ever made sense that you can pay a heavily bloated staff, while also paying up to twice as many not to work with their golden pensions.  If anybody really gave a shit, 90% of gov workers could be laid off BECAUSE THEY DO NOTHING.  The rest could happily be paid $15/hour, since after all this is a recession.

I'd love to see the ILL budget.  I'll bet 75% goes to nigger care and welfare for perfectly able-bodied losers.  Cut off all free shit to anyone not honestly disabled to the point of being unable to work AT ALL.  Even a blind person could be answering phones.  A person in a wheel chair can do computer work.  This would give them a lot more pride and purpose than sitting around watching soaps all day.

Money Counterfeiter's picture

Liberals are lazy sociopaths who will say anything and do anything to get out of working for a living. 


Gold is the only known cure for that bullshit.

I MISS KUDLOW's picture

They can get away with it as long as they kepp Cubs playing,,not that it matter when they won their series the other day half the fans were looking down at their phones and not watching the game

JLee2027's picture

Judges in Illinois have been handing out court orders to keep state funding going. I kid you not. It's absurd.

Keyser's picture

Illinois should keep electing Luis Guitierrez, that bastion of socialist values whose mission is to give all american assets to illegal aliens... That should work out really well... 


Fahque Imuhnutjahb's picture



There is a way out of this.  The pension administrator simply needs to invest in some select tranches of triple-A rated

Mortgage Backed Securities.  By doing this, high yield gains with compounding interest will right this ship in short order.

I can't believe someone's not considered this sooner!!  The only risk I see is if cock sucking: investment bankers,

mortgage bundlers, rating agencies, regulatory agencies, and Abacus constructing, thieving, muppet sodomizing,

short sellers were to collude to engineer an orchestrated take down of the pension plans; thus leaving retirees holding their

dicks in one hand and the bag in the other.  But, that's fat tail, six sigma, black swan territory---so we're all good.

Fahque Imuhnutjahb's picture



P.S.-----  In the off chance the above scenario were to, (God Forbid!) unfold, don't worry--because we have some patriots with

the courage to act, and take tax dollars from the aggrieved pensioners and the rest of the 'Murkan citizenry, and use it--not to

make the pension plans and other raped muppets whole--but rather, to give to the list of above cock suckers to buy up

the distressed assets at firesale prices to resell at a profit to the folks that will pick up the tab for decades to come.  So feel

confident knowing that there is a Plan B--(code for buttfuck) to keep the economy on track.

waterwitch's picture

Can federal pension defaults be far behind?

Vincent.Vega's picture

Once FED stops functioning as a mechanism of colonial taxation.

PT's picture

I's got a pension plan.  I's gonna become a bankster!  Those guys always get money even when they're flat-broke up to their eyeballs in debt, incompetent, criminal ... they always get bailed out!  Don't invest in super.  Buy yourself a job in a TBTF bank!

COSMOS's picture

No Debt of course the offices will be empty, but the bolthole mansions in New Zealand will be full and the wine cellars fully stocked.

Collapsed's picture

mkkby aka Mr. Simpleton,

Please let more educated folks debate the nuances of economics.  In all honesty, you are probably as big of a loser as those you call losers.  Look in the honest with yourself.  You most likely are poorly educated, live in a small rural town and have never been outside your city limits.  

Meat Hammer's picture

"Educated" and "Intelligent" are not synonymous.

new game's picture

so who appointed you as god? mirrors, so you can take a look...

r00t61's picture

Yes, I am all in favor of "more edumacated folks" like Paul "I am a bearded potato" Krugman and Alan "Mr. Magoo" Greenspan debating the "nuances" of eCONomics.

MontgomeryScott's picture

AHH, The 'nuances of eCONomics' line. Hahvahd, OR Yale version?

1) If your outgo exceeds your income, your upkeep will be your downfall.

2) Borrowing at interest is usury.

3) An honest day's labor for an honest day's wages.

The State of Illinois (incorporated) is corrupt from top to bottom, and has wasted, spent, skimmed, sweetheart-dealed, and FUCKED the people that live therein. Promising niggardly worthless people more and more 'welfare', thay have skimmed the top. Appointing their insider sweetheart-dealers to impliment the 'benefits', they have ripped off the taxpaying people. In order to pay ever-higher interest rates on loans against future tax revenues, they have driven the productive businesses and people out of the State.

NOW, the shit is hitting the fan, and a bitch like you has the answer: People who are pointing this OBVIOUS shit out are 'unedumacated' (unlike YOURSELF).

What part of 'Fuck you, you edumacated fucking ass-kissing moron' do you NOT understand here?

If you want to see Chicago burn FOR REAL, watch when the State fails to pay out their WELFARE BENEFITS.


Bitch like YOU will probably vote for that doddering old Socialist 'useless eater' Sanders. I've lived across the globe, am fairly-well educated, and I don't recognize the fiction of corporate 'City limits'. Blue pills are uppers, and red pills are downers. Niggers call each other 'brother' and 'sister' because they don't know who their daddy is.

D Nyle's picture

Ma degree in Ebonic's is all I knneed


Countrybunkererd's picture

They should be Greeced.  Where are the pensions for everyone else?  I am self employed and get ZERO pension but have had to pay for their pensions by taxation or forced liquidation.  I don't care what was promised, your ponzi blew up in your face.  These same pensioners can care less about the private sectors retirement prospects, why should I or anyone else have to pay AGAIN to cover their waste and corruption (Chitcago's low level of corruption as it is) to ensure they got larger and larger pensions for themselves.

Join the rest of America that has lost their retirement, need a second and third job to cover healthcare, can't buy a home, and so on and so on.  I don't want you to go hungry, but having to turn your heat down to 63 degrees, worry about electricity bills now that Odumb@$$ killed coal, is NECESSARY for you to see what the rest of America does...BUDGET.  You should not feel sorry for them, they are angry that they were robbed, everyone else, as a private sector member has been getting robbed for decades.  Join the club.  As for your pensions, well that is up in smoke now, so get over it and be the first to apply for a X-mart greeter, since they are cutting back now, competition is at an all time high.

JLee2027's picture

Sad story on the news the other day. A retired fireman burned to death on his riding lawn mower.

And then I thought...fireman...has a riding lawn mower...must be a big ass yard, heck of a ...PENSION!

LowerSlowerDelaware_LSD's picture

"...retired fireman burned to death on his riding lawn mower."

How the eff did Darwin not get this one while he was fighting real fires all of those years?

MontgomeryScott's picture

He was a fireman, not a mechanic!

Probably tried to put out a gas fire with a water hose.

O.K. if he was in a car with all the windows rolled up, and the thing rolled over and crushed down so that none of the doors could be opened, and it caught fire/exploded, I'd understand this. BUT: A RIDING LAWN MOWER?

'I smell gas. Oh, well, probably nothing to worry about. I'll look at it after I get mowing my palatial mansion grounds...'

PERHAPS he was 'Mr. Safety', and was wearing a seat belt on his Toro (and the damned buckle jammed when it caught).

Hopeless for Change's picture

Your solution makes perfect sense, and therefore will be ignored

TheObsoleteMan's picture

Most liberals and progressives DO take it in the ass, and they LOVE IT.

FringeImaginigs's picture

Don't like government, don't like taxes, don't like welfare and all that craap. Have I got a place for you!  Somalia, Eritrea, Kenya, Syria, Nigeria.  But don't forgoet to bring a truck load of ammo, cause the other locals might just take a liking to your wife, and there isn't any public police to help you.

lasvegaspersona's picture


you are wacky

we are months away from that...let us enjoy the last few weeks with our illusions and delusions OK?

new game's picture

why leave the country? patience. as far as the wife goes, like she said "id take a bullet for you", tink bout dat, you fucking gunbanner, looser...

Government needs you to pay taxes's picture

What if I dont like welfare or the crime that comes with living next to niggers?

EBT excepted's picture

ain' no damn crime to be on d'EBT bruthah...widout d'wefare, da 'conomee ca go bad...

Chuck Walla's picture

Seems MediaMaters and MoveOn have unleashed the trolls. Thin skinned and obvious, they type among us offering nothing. 




r00t61's picture

Since you like government so much, go move to North Korea.

sun tzu's picture

Yes because the only two forms of government are Somalia's or a corrupt police state run by and for Wall St bankers. Go fuck your mother up the ass again

HyperinflatmyNutts's picture

What about the Corporate welfare? How about the the 100's of billions we have given Israel??

How about the money the MIC steals every year with their Bullshit boogieman war (the terrorist r coming)

What about the Billions on the Bullshit war on drugs and the bloated DEA budget? 

EBT excepted's picture

nigrows needs da care too bruthah...